US Federal Reserve chairman Ben Bernanke said Wednesday that the Fed was prepared to renew its stimulus efforts if the economy remains feeble.

Two weeks after the end of its $600 billion bond-purchases program, or quantitative easing dubbed QE2, Bernanke told members of Congress that a new such effort could be launched, and other measures be taken, if economic weakness persists through the second half of the year.

"The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying the need for additional policy support," Bernanke said.

He said the Fed could follow in the footsteps of QE2 and increase its purchases of US securities, pushing more liquidity into the economy.

It could also cut a key interest rate it pays to banks on their reserves -- which could help push down commercial lending rates, he said.

Meanwhile the Fed will take its time unwinding the QE2 program, he confirmed. The central bank will continue to reinvest the original $600 billion into new Treasury securities and not reel the funds in as long as economic growth remains tepid, he said.

Bernanke defended the quantitative easing program, which some economists and finance industry analysts have argued had little impact in helping the economy recover from the 2008-2009 recession.

"The program had the intended effects of reducing the risk of deflation and shoring up economic activity," he said.

"This was a significant achievement, as we know from the Japanese experience that protracted deflation can be quite costly."

He also said it helped boost employment, even though the jobless rate remains a high 9.2 percent.

US Federal Reserve chairman Ben Bernanke said Wednesday that the Fed was prepared to renew its stimulus efforts if the economy remains feeble.

Two weeks after the end of its $600 billion bond-purchases program, or quantitative easing dubbed QE2, Bernanke told members of Congress that a new such effort could be launched, and other measures be taken, if economic weakness persists through the second half of the year.

"The possibility remains that the recent economic weakness may prove more persistent than expected and that deflationary risks might reemerge, implying the need for additional policy support," Bernanke said.

He said the Fed could follow in the footsteps of QE2 and increase its purchases of US securities, pushing more liquidity into the economy.

It could also cut a key interest rate it pays to banks on their reserves -- which could help push down commercial lending rates, he said.

Meanwhile the Fed will take its time unwinding the QE2 program, he confirmed. The central bank will continue to reinvest the original $600 billion into new Treasury securities and not reel the funds in as long as economic growth remains tepid, he said.

Bernanke defended the quantitative easing program, which some economists and finance industry analysts have argued had little impact in helping the economy recover from the 2008-2009 recession.

"The program had the intended effects of reducing the risk of deflation and shoring up economic activity," he said.

"This was a significant achievement, as we know from the Japanese experience that protracted deflation can be quite costly."

He also said it helped boost employment, even though the jobless rate remains a high 9.2 percent.

"I want to take this opportunity to mention how thankful I am for an Obama re-election. The choice was clear. We cannot live in a country that treats homosexuals and women as second class citizens. Homosexuals deserve all of the rights and benefits of marriage that heterosexuals receive. Women deserve to be treated with respect and their salaries should not depend on their gender, but their quality of work. I am also thankful that the great, progressive state of California once again voted for the correct President. America is moving forward, and the direction is a positive one."

Bernanke was a tenured professor at Princeton University and was chair of the Department of Economics there from 1996 to September 2002, when he went on public service leave. From 2002 until 2005, he served as a member of the Board of Governors of the Federal Reserve System. Here he outlined the Bernanke Doctrine and first spoke of The Great Moderation, where he postulated that we are in a new era, where modern macroeconomic policy has decreased the volatility of the business cycle. He then served as Chairman of President George W. Bush's Council of Economic Advisers before President Bush appointed him to be Chairman of the United States Federal Reserve on February 1, 2006. Bernanke was confirmed for a second term as Chairman on January 28, 2010, after being nominated by President Barack Obama.

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